Key highlights - The New Path to the C-Suite

By Michael Jarosz

Different times and different circumstances call for different leadership skills. How do you prepare yourself to move up? What abilities should young would-be executives hone as they strive to reach the next level? Those aren’t easy questions. The trends vary by function, geography, and industry—and, of course, by company. Nevertheless, in examining hundreds of executive profiles and interviewing numerous top managers about requirements for senior leaders past, present, and future, Harvard Business Review has found some clear signals about how C-level jobs are evolving and following are some highlights of skills required to currently excel in these roles and what are expected in the future. This is a condensed version of the article and the entire article is available at: http://hbr.org/2011/03/the-new-path-to-the-c-suite/ar/1.

See a visual checklist identifying key skills in various career paths.

Conclusion

Requirements for all C-level jobs have shifted toward business acumen and “softer” leadership skills. Technical skills are merely a starting point, the bare minimum. To thrive as an executive, an individual needs to be a good communicator, a collaborator, and a strategic thinker. The trend is toward a general business orientation over a functional one. Going forward, executives will not simply manage their own business areas, but also actively advise the CEO on key decisions.

As one executive recruiter put it, “The C-level person today needs to be more team-oriented, capable of multitasking continuously and leading without rank, and able to resist stress and make sure that his subordinates do not burn out. And he needs to do all of this with a big smile in an open plan office. In other words, we’re looking at a whole new breed of top executive.”

Chief Executive Officer (CEO)

HBR does not go in depth about how the CEO role has evolved. Instead, they focus on the two main trends influencing the direction of the CEO position:

It’s less and less common for board members to be selected by the CEO, as boards and their nominating committees have assumed primary responsibility for director recruitment. In fact, it’s now more common for the CEOs to owe their jobs to the boards rather than to their predecessors. This shift will mean more accountability at the top. And perhaps not surprisingly (given the shift of hiring power), boards have also become a significant source of CEO candidates.
The types of skills increasingly in favor are strong communication, empathy, collaboration, and trust building. One skill that will be of foremost importance will be the ability to elicit public trust as the face of the company. This will include facility and credibility with socially responsible initiatives.

Chief Information Officer (CIO)

PAST: The CIO position evolved from the lack of business savvy among IT staff. The CIO understood new technologies AND how they applied to business strategy, including competitive advantage. CIOs were focused on leadership and organizational effectiveness and were able to broker the complex relationship between business leaders and the IT department. As globalization began to emerge, IT managers also had to deal with integrating and standardizing processes and platforms across multiple operating companies, group functions, and regions.

PRESENT: Following the credit crunch, major technology expenditures need more thorough justification. IT executives have to make complex decisions based on rigorous analyses of return on investment. Their jobs are less about managing projects well and more about managing the right projects well. The IT function requires a leader who understands the increased complexity of business and how IT strategy, business strategy, risk management, and finance interact.

FUTURE: CIOs will need a sophisticated mix of skills. Companies will seek “hybrid” CIOs who have not only business savvy but also experience with analytics, organizational design, and infrastructure— and who know how to wire together a holistic system that can support global growth. A commercial background, sales and marketing knowledge (particularly e-commerce), and/or stints in supply-chain management and logistics will all be a plus. The most sought-after CIOs will know how to exploit an ocean of collected data and use it as a competitive distinguisher in the markets. Other hot topics are the ways ideas are shared and gaining customer feedback.

Chief Marketing & Sales Officer (CMSO) / Chief Commercialization Officer (CCO)

PAST: Marketing and sales functions operated as silos and tended to concentrate on different areas: marketing focused on B2C and creative, brand-driven advertising; sales focused on B2B, management of salespeople, and CRM. At the turn of the millennium, marketing and sales each began to broaden in scope as new channels emerged. For example, e-commerce initiatives forced sales leaders to grapple with marketing issues, such as delivering brand messages directly via the web.

PRESENT: Trends like crowdsourcing are accelerating innovation, and social technologies, interactivity, and mobility have become integral to consumer media. The lines between marketing and sales are continuing to blur as they must respond seamlessly to new opportunities. This has given rise to a new role: the chief commercial officer (CCO). As the CEO’s single point of contact on the commercial side, the CCO manages innovation, product development, marketing, and sales—across all platforms, both digital and bricks-and-mortar.

FUTURE: Technology—particularly digital channels—will continue to dominate marketing and sales strategy. Demand for segmentation capabilities will grow as firms address more diverse customers who expect tailored products and solutions as well as higher levels of service. Executives will be managing a workforce that has grown up in the digital age and catering to a customer base that has an ever-increasing desire for speed and easy interaction.

Chief Financial Officer (CFO)

PAST: The typical CFO was a bean counter, responsible for reporting the numbers, measuring performance, and managing checks-and-balances processes. CFOs had accounting and financial expertise as well as strong quantitative skills, but their scope was narrow and confined to their department and country.

PRESENT: Managing financials is increasingly complex; multinationals can no longer keep finance issues within geographical boundaries. Risk management has hit the executive agenda and the CFO has become the CEO’s partner in making ambitious but rational choices on a wide range of issues. This includes finding new opportunities and assessing their strategic and financial merits and risks. CFOs need a broader background, such as experience with capital markets, mergers, and information technologies, as well as operations and other corporate functional areas. CFOs are also playing a more active role in managing external stakeholders, particularly investors.

FUTURE: CFOs will operate globally and will regularly work with nonfinancial departments on growth initiatives and international expansion. Thus they need both a commercial sensibility and a global mind-set. And whereas today CFOs develop and implement systems and processes for budgeting and performance metrics, tomorrow they’ll also need to provide real-time operational and financial data and analyses. They’ll continue to perform the traditional functions of managing finances, reducing costs, putting in place the appropriate controls, and compliance, but strategic thinking will be more important. Contributing to a firm’s competitive advantage will be essential.

The General Counsel (GC)

PAST: In-house lawyers kept an eye on regulatory compliance, closed deals, reviewed documents, and dealt with employee issues. The most challenging and important issues were typically sent to outside counsel. Attention to risk management broadened the role of GCs over time. Companies began to seek legal officers who could anticipate and mitigate safety, security, and reputational risks before public rollout of new initiatives. Many GCs even became viable candidates for CEO.

PRESENT: Given intensified regulatory scrutiny, GCs are now under more pressure and work just as hard as partners in law firms. To become GC, a lawyer needs experience negotiating with legal and regulatory agencies and industry watchdogs. A strong external reputation and network – especially with government agencies and authorities – will often tip the scale in the candidate’s favor. CEOs also look for lawyers who can operate across geographic boundaries.

FUTURE: GCs will need to be driven and skilled to deal with a range of new and evolving challenges, like content piracy, privacy, and environmental initiatives. GCs will continue to function as high-level advisers and companies will prefer GC candidates with in-house experience who understand how to manage the people and finances of a legal department. GCs will also need to manage outside firms as they outsource legal work (in a cost effective manner). This requires GCs to be strong in strategic and business knowledge, financial skills, and collaboration. To stay ahead, students at law school should take more business-focused and international legal courses. Fluency in multiple languages and cultural awareness are also key new skills.

Chief Supply-Chain-Management Officer (CSCMO)

PAST: SCM once consisted of a handful of disciplines that were not systematically linked. As companies expanded internationally, separately handling the different aspects of SCM became expensive and ineffective. To reduce costs, CSCMOs pursued strategic sourcing and built collaborative relationships with suppliers. CEOs thus looked for CSCMOs who knew how to achieve cost efficiencies and possessed operational and outsourcing expertise.

PRESENT: Today SCM links the process end to end: Planning, procurement, manufacturing/operations, and logistics work together to devise economical solutions. The CSCMO is expected to know all four functions thoroughly and to create an environment in which they share knowledge and work together smoothly. Sustainability is also rapidly becoming important. Value can be created by executing and sharing sustainability strategies throughout the supply chain, from suppliers to customers.

FUTURE: CSCMOs will continue to pursue low costs through ever more diverse sourcing, both onshore and off. They will need to manage long-distance logistics and transportation, taking into account unpredictable external factors that could have a major impact on costs, such as political instability or oil prices. International experience is critical; SCMOs will need to understand emerging markets, which will often force them to innovate. Distribution and logistics challenges in India, for example, are so complicated and challenging that ordinary solutions fall short there. CSCMOs will also have to be technologically savvy as they partner with CIOs to invent new ways of interacting with customers and suppliers. Beyond all that, CSCMOs will need to be big-picture thinkers who can participate in strategic and operational decisions at the highest level. Experience in organizational design, running a business unit, managing a P&L, and interacting with customers will serve CSCMOs well.

Chief Human Resources Officer (CHRO)

PAST: HR has long been viewed as largely administrative and its leaders have mostly been relegated to managing policies and cultural initiatives. As multinational companies expanded further into developing countries, hiring and managing talent became more complicated. Cultural differences created internal tensions and confused recruiting efforts—making strong talent programs more vital than ever.

PRESENT: Despite talent being integral to company competitiveness, HR still struggles to gain clout. Many CEOs do not understand how to leverage HR to address important topics of compliance, risk, and executive compensation. But there are signs of change. Companies are increasingly filling the CHRO role with leaders from the business side, such as operations, marketing, or corporate law. A legal background is particularly helpful; complex regulatory and compensation issues can consume HR if not properly dealt with, leaving other parts of the job undermanaged.

FUTURE: With pressure on HR to shift focus from theory to business management, CHROs will need an understanding of commercial models, as well as experience with change management and finding pragmatic solutions to complex issues. Faced with changing workforce demographics, CHROs will continue to lead the charge in attracting and developing top talent. They will have to create high-performing organizations with the least possible disruption (a tall order). Ideally, a CHRO has lived and worked in several regions as he/she will have to manage and juggle the needs and contributions of experienced boomers, eager millennials, and professionals from emerging economies. Knowledge in the financial modeling, taxation, accounting, and legal issues surrounding global compensation practices will be expected. CHROs must also design and implement leadership succession plans—a matter woefully neglected in many companies.

For further information, please contact:

Austin Nairn
Programs Coordinator

The Company of Young Professionals
& Leaders of Tomorrow Mentorship Program^®
(604) 641-1246
anairn@boardoftrade.com

The Vancouver Board of Trade
Suite 400, 999 Canada Place
Vancouver, BC
V6C 3E1
604-681-2111
The Vancouver Board of Trade

I want to network!

Check out the upcoming CYP events >>

engage your team

Enrol your team in leadership development >>

why should i join?

Discover the benefits of a CYP membership >>

cyp certificate

CYP Engaged Leadership Certificate defined >>